* NSE index down 0.16 pct, BSE index 0.31 pct lower
* Biocon drops up to 7.6 pct on U.S. FDA observations
* Nifty pharma index down as much as 2.5 pct
By Jessica Kuruthukulangara
Aug 4 (Reuters) - Indian shares fell on Friday, dragged down by Reliance Industries Ltd on profit-taking, while drugmakers declined after the U.S. health regulator found quality lapses at a facility of Biocon Ltd.
The findings of the U.S. Food and Drug Administration mark another blow to the Indian pharmaceutical industry, which has faced regulatory sanctions and warnings over quality control to inadequate standards.
“For healthcare companies, there are issues which are progressively getting resolved,” said Rakesh Tarway, head of research at Reliance Securities.
However, there are growth issues because of the price erosion in the U.S. market, so healthcare companies will be under pressure for some time, he added.
The broader NSE index was down 0.16 percent at 9,997.25 as of 0523 GMT, while the benchmark BSE index was 0.31 percent lower at 32,139.32.
Both indexes were down for the week after posting four consecutive weekly gains.
Shares of Biocon fell as much as 7.6 percent, posting their biggest intraday fall in five months, after the U.S. FDA issued 10 observations pointing at aseptic practices following an inspection at the drugmaker's plant in Bengaluru. bit.ly/2u9t5ks
Almost all constituents of the Nifty pharma index , which shed as much as 2.5 percent in what could be its third straight session of decline, were in red.
Sun Pharmaceutical Industries Ltd dropped as much as 4.5 percent, while Dr. Reddy’s Laboratories Ltd fell over 3 percent.
Reliance Industries, the top drag on the NSE index, fell as much as 2.1 percent after two consecutive sessions of gains as investors locked in profits. The stock hit a record high on Thursday.
Meanwhile, Indian Oil Corp Ltd gained as much as 5.1 percent after the company reported better-than-expected first-quarter profit on Thursday. (Reporting by Jessica Kuruthukulangara in Bengaluru; Editing by Subhranshu Sahu)